Auditors and ethics: its worse than you think
A decline in ethics would ultimately have a ripple effect into the economy with the poor the most likely collateral damage
Opinion surveys are tricky things. They may reveal more about the people being surveyed than the issues being interrogated. Perhaps the reason SA does so badly in surveys is because South Africans are so tough on themselves.
Hold that comforting thought as you peruse the results of yet another survey revealing the continued slide in the standards of governance and ethics within SA organisations.
The latest survey comes courtesy of the Institute of Internal Auditors (IIA). Its corporate governance index 2017, which surveyed chief audit executives (CAEs) in the public and private sectors, points to a continued decline in ethics.
In 2017 only 53% of the 281 CAEs who responded strongly agreed that ethics is an important part of their organisation’s culture. This is down from 66% in the inaugural index in 2013.
"This downward trend does not bode well for SA as a decline in ethics would ultimately have a ripple effect into the economy with the poor the most likely collateral damage," says Claudelle von Eck, CEO of the IIA.
The IIA results are in line with the findings of the inaugural Anti-intimidation & Ethical Practices Forum (AEPF) survey released in September. That survey found only 9% of professionals working in the public sector believe their leaders are ethical, though a substantial 66% of private sector professionals believe theirs are.
CAEs in the public sector were far less optimistic than their counterparts in the private sector.
There were some puzzling shafts of light in the grim picture with 60% of CAEs in metro municipalities, up from 33% in 2016, agreeing that ethics is an important part of their organisation’s culture and 57% of CAEs in nonprofit companies agreeing, up from 33%.
Though Von Eck acknowledges that responses could be influenced by the wall-to-wall media coverage of corruption, she says a lot of that influence is filtered out by the way questions are asked.
But she fears that respondents may have a too narrow interpretation of ethics with a focus on just fraud and corruption.
"A narrow view of ethics excludes practices that increase inequality, perpetuate repression of women and people of colour and harms the environment, for example," said Von Eck.
It’s likely a more appropriate view would have generated an even grimmer response. "Executives think they’re ethical as long as they don’t commit fraud and corruption; the issue is much broader than that."
Unsurprisingly, government-related organisations including state enterprises recorded the starkest declines in ranking. On the question of whether the organisation has suitable human resource capital to execute its strategy effectively and optimally, only 8% of CAEs in the national government said they strongly agreed.
Of course the really troubling thought is that South Africans may not be tough enough on themselves.